2.4 Operation domain

the total profit [6]. Generation and consumption are managed in such a way that the

The need for this new energy management paradigm is a consequence of the uncertainty and unreliability introduced by the diffusion renewable energy sources,

dispatchable generators, flexible loads, and energy storage. Furthermore, this paradigm allows the indirect access of renewable energy sources to the ancillary service

From the point of view of network operators, VPP simplifies system's management, since uncertainties and imbalances are locally addressed by the aggregator,

Demand response refers to the active participation of customers to power system's balancing, requested by grid operators. Customers are encouraged to modify their load pattern by changes in price of electricity or incentive payments [7].

The transition toward smart grids is an essential element for the development of the demand response paradigm, since it requires advanced monitoring, communication, and control systems, in order to be correctly implemented in future power

From the customer's point of view, the participation in a demand response

• Load shift: the customer shifts the energy consumption to a different time

• Local generation: the customer produces the energy needed locally, reducing its

Market operators can act on the demand response using different strategies that

• Price programs: customers pay time-varying prices during different periods of the day. The highest price is during the peak hours, while the lowest is set for

• Event-based programs: customers are rewarded for changing their load upon request. Demand reduction signals may be sent to the participating customers that can voluntarily change their absorbed power in order to get the established

consisting in the amount of reduction capacity and the correspondent price.

Demand response has several benefits related to different domains. Customers

• Bid-based programs: different customers send demand reduction bids,

participating in demand response programs have direct economical rewards;

Depending on the bids, the cheaper ones are chosen.

• Load curtailment: the customer simply reduces its load, accepting the

markets, since bad predictions of renewable production can be adjusted by

Introduction of a VPP leads to less risky and more efficient bidding in electricity

market sees VPPs as a single flexible power output toward the grid.

markets, increasing their potential integration in power systems.

which can assure a secure or at least less uncertain power production.

in particular wind and solar power.

Research Trends and Challenges in Smart Grids

program requires one of the following actions:

consequences of this reduction.

dependence from the grid.

can be classified in three main branches:

incentive for a particular event.

2.3.2 Demand response

systems.

interval.

off-peak hours.

4

Operation domain is the set of actor and applications required for the reliable, safe, and efficient operation of power systems. The main duties are related to planning, monitoring, protection, maintenance, and control of power systems. The increasing diffusion of distributed renewable energy sources is posing a series of challenges to operators. Traditional power systems were designed for one-way power flows, while in modern grids, backward flows are frequent. Furthermore, the intermittent nature of solar and wind energy requires special attention to avoid system's imbalances and stability problems.

Smart grids are improving operators' capabilities with advanced technologies.
